Luxury Cars: Not So Luxurious When It Comes To Repairs

on Oct 01 in Bad Used Cars tagged Bad Used Cars, luxury car, repairs, Used Cars by Mark

If you’ve ever considered buying a late-model German luxury car, make sure you do your homework first. Recently we had the opportunity to see what happens when a 2000 Audi A6 has a power steering failure…

Our little Audi developed a power steering leak at one of the seals. This type of repair can be pretty easy in most cars, but our Audi is a little different. In order to replace or rebuild the power steering rack the sub-frame needs to be lowered to gain access to the rack. This operation is listed as a 12-hour repair in the automotive labor repair manuals. In most shops, the labor rate is about $100.00 per hour (as of Sept. 07) and that means the labor alone on this repair is about $1,200.00. But that’s just the start.

Removing the rack is only the first step in the repair process. Once the Audi power steering rack has been removed, we still need to fix the leak. This can be accomplished in one of two ways: 1) Replace the rack or 2) Rebuild. Amazingly, the cost of both of these options is nearly the same – about $1,000.00. So, most people opt to replace the rack. Now we’re up to $2,200 to fix a leaky steering rack, but we’re not done yet.

The Audi’s steering rack uses a very special power steering fluid called Pentosin CHF 11S. This is the only fluid that can be used in the rack, and it runs about $20.00. Per quart. The good news is that the system only takes 19 quarts. And the hits just keep on comin’.

So let’s recap: We’ve purchased a $1,000.00 power steering rack, $1,200.00 of labor, $380.00 of power steering fluid and a 10% shop supplies fee of $258.00. That’s a grand total of $2,838.00 (plus tax). Sounds a little scary I know, but our Audi is damn-near useless without power steering…

What’s the bottom line? While an Audi A6, BMW M5 or Mercedes Benz C class all sound like great ways to show the world you have arrived, they might empty your bank account. If a power steering rack repair can be this expensive and complicated, just imagine what an air conditioning repair will cost! Our advice, avoid used luxury vehicles whenever possible. With that being said please understand we don’t dislike German luxury vehicles. The German manufactures have excellent warranties on their new vehicles. Most new German vehicles cover all maintenance and repairs for the first four years or so. This type of coverage can give you real piece of mind — but the moment that the warranty expires, watch out! Things can get pretty expensive in a hurry.

Old Luxury Cars: Steer Clear If You Can

on Oct 01 in Bad Used Cars tagged Bad Used Cars, luxury car, Used Cars by Mark

Buying an old used car (anything over 10 years) can be risky, but buying an old luxury car can be very risky. In fact, I’ve seen more MAJOR problems with older used luxury vehicles than any other type of vehicle. The moral here is simple — don’t make the mistake of buying a nice older car (like a 95 Mercedes) when you could have had a cheap newer car (like an 01′ Toyota) for the same price.

When you buy an older luxury vehicle, you’re taking a huge risk. Although it’s really cool to tell your friends and family you just bought a late nineties Range Rover with leather and a V8, the reality is you’ve bought a vehicle that’s incredibly expensive to repair. The fact is that most luxury vehicles don’t age very gracefully. Repairs can be very expensive and irritatingly frequent on older luxury vehicles such as Cadillac, Mercedes Benz, Land Rover, BMW, Lincoln, Audi, Porsche, etc. The reason is really simple – these cars ALWAYS have expensive and complicated parts that require special training to replace. Often times, these parts have to be imported from another country. Add it all together and you’ve got an expensive repair that a lot of people can’t afford.

Think of it this way – when that luxury car was brand new it had all the latest and greatest features that money could buy. In fact, some of the features on that older used luxury car were cutting-edge at the time the car was built. Cutting edge features are always more expensive to repair and less reliable than older, tried-and-true features. That means that when you buy a used luxury car you’re buying a car that is more likely to break down and more expensive to repair as it gets older.

Compare a 100k mile 1995 Mercedes Benz E320 to a 60k mile 2001 Toyota Corolla LE. Both have a retail value of about $7k (as of Sept. 07). The Corolla should run problem-free for another 60k miles (if not much, much more). The E320 (a beautiful car) should run 20k miles before it likely develops a problem. Please understand — I’m not saying the E320 is a bad car. I’ve just found that on average, most cars run about 120k miles before requiring a major repair. Because the Mercedes is so expensive and complex, it will cost 2 to 5 times as much to repair as the Corolla. Because the E320′s miles are so much higher, that repair will occur MUCH sooner.

Either way, you buy a car for $7k dollars. However, with the Corolla, you get to drive it for years before you make a repair. With the E320, you get to drive a year or two before you make a repair. Oh yeah – when you do need a repair, it will cost a lot more with one than the other.

It doesn’t take a CPA to figure out which option makes more financial sense.

I know some of you are saying “Mark, I don’t want an 01′ Corolla. I want a Benz.” Please. You don’t have to tell me about that because I know. I want one too. But here’s the deal – people that can afford to buy a new Mercedes got their money because they made good financial decisions. If you ever want to own a new Mercedes some day, start now by making good financial decisions and saving money. Don’t buy a car you know is going to be expensive to repair and likely to break soon. Besides, if you really need a nice car to impress someone, you can always rent something…